Interim Results

TANDEM GROUP PLC
2 September 1999

Interim Report for the 26 weeks to 1 August 1999

                          Chairman's interim statement

Your board is pleased to report that the results for the 26 weeks to 1 August
1999 show a profit after interest and before taxation of £184,000. This compares
with a loss of £1,012,000 for the same period last year. The operating profit of
£594,000 was a significant improvement on the loss of £308,000 in the first half
of last year.  Net interest payable and similar charges amounted to £558,000
before deducting an exceptional gain of £148,000 (1998: nil) following the
revaluation of a deutschmarks loan.

These results are clear evidence of the successful consolidation of the Group's
cycle operations and the termination of other activities.  We expect to be able
to maintain this improvement in the second half of the year.

As previously reported the elimination of business with little or no margin has
resulted in a significant reduction in turnover.  This policy has, however,
increased profitability and reduced the working capital requirement.

The Company's brands, Falcon, Claud Butler, Townsend and British Eagle, are well
regarded by retailers and consumers.  Customers are now benefiting from all
products being supplied from the Group's North Lincolnshire operations where
there is an experienced management and workforce with a reputation for quality
and service.  Now that the business is clearly focused and profitable, we are
cautiously expanding our marketing and promotional resources to increase sales
of product ranges with acceptable margins both in the UK and abroad.

Proceeds from property disposals in July totalled £4.5 million, after costs. 
As the transactions were completed at the end of the half year there was little
positive effect on profit in these results.  In addition to the elimination of
property holding costs, the annual interest charge will be reduced by over
£300,000, at current rates, as a result of the disposals.

Borrowings have significantly reduced in the period but still remain high.  In
addition to the interest charge, the current overdraft level incurs an overhead
cost which is disproportionate to the size of the business.  Further action is
therefore required to strengthen the balance sheet and restore shareholder
value.  Your board is already considering a number of possible opportunities and
will carefully evaluate these along with others that are identified.

Graham Waldron 
Chairman

Registered office: Bridge Street, Brigg, North Lincolnshire, DN20 8PB

For further information contact:

Thursday            2 September 1999 after 2.45 p.m
G Waldron           Chairman                         01652 656000
M P J Keene         Finance Director                 01652 656000
A P Vicary          Managing Director (Cycles)       01652 656000

Friday 3 September 1999 and thereafter
M P J Keene         Finance Director                 01733 211399


                       Group profit and loss statement

                                  26 weeks to     26 weeks to      52 weeks to
                                 1 August 1999   2 August 1998   31 January 1999
                                    Unaudited      Unaudited         Audited 
                                      £'000          £'000            £'000

Turnover - continuing operations      11,318          17,596          31,256
Operating profit/(loss)
Continuing operations                    542            (308)         (1,948)
Exceptional income/(costs)                52               -          (2,692)
                                      ------          ------          ------
                                         594            (308)         (4,640)
Discontinued operations                    -             (23)            259
Less utilisation of prior year provision   -              23              89
                                      ------          ------          ------
Total operating profit/(loss)            594            (308)         (4,292)
Loss on disposal of discontinued 
operations                               (37)              -            (235)
less utilisation of prior year 
provision                                 37               -             212
                                      ------          ------          ------
Profit/(loss) on ordinary activities 
before interest and taxation             594            (308)         (4,315)
Net interest payable and similar 
charges                                 (410)           (704)         (1,502)
                                      ------          ------          ------
Profit/(Loss) before taxation            184          (1,012)         (5,817)
Taxation                                   -               -               -
                                      ------          ------          ------
Profit/(loss) after taxation             184          (1,012)         (5,817)
Finance costs of non-equity shares       (33)            (33)            (65)
                                      ------          ------          ------
Retained profit/(loss) for the period    151          (1,045)         (5,882)


Earnings(loss) per share
Basic                                   0.16p          (1.11)p         (6.25)p
Diluted                                 0.16p          (1.06)p         (6.22)p


                            Group balance sheet

                                 1 August 1999   2 August 1998   31 January 1999
                                    Unaudited      Unaudited         Audited 
                                      £'000          £'000            £'000


Tangible fixed assets                  1,304           8,145           5,839

Current assets
Stocks                                 5,639           9,574           6,242
Debtors                                4,997           8,311           4,524
                                      ------          ------          ------
                                      10,636          17,885          10,766
Creditors
Amounts falling due within one year
Bank overdrafts                        9,713          14,140          15,539
Trade creditors                        3,330           3,731           2,351
Bills of exchange                      1,676           3,540           1,398
Other creditors                        1,321           2,134           1,420
                                      ------          ------          ------
                                      16,040          23,545          20,708

Net current liabilities               (5,404)         (5,660)         (9,942)

Total assets less current liabilities (4,100)          2,485          (4,103)

Creditors
Amounts falling due after more than
one year                                  10              58              16
Provisions for liabilities and charges   599           2,523             774
                                      ------          ------          ------
                                      (4,709)            (96)         (4,893)

Capital and reserves
Called-up share capital                4,703           4,703           4,703
Share premium account                  4,280           4,280           4,280
Capital reserve                          406             406             406
Profit and loss account              (15,249)        (10,563)        (15,400)
                                      ------          ------          ------
Equity shareholders' funds            (5,860)         (1,174)         (6,011)
Non-equity minority interests          1,151           1,078           1,118
                                      ------          ------          ------
                                      (4,709)            (96)         (4,893)

                      Consolidated cash flow statement

                                            26 weeks to 26 weeks to 52 weeks to
                                               1 August    2 August  31 January
                                                   1999        1998        1999 
                                              Unaudited   Unaudited     Audited 
                                                  £'000       £'000       £'000

Net cash (outflow)/inflow from operating          1,797        (753)     (1,240)
 activities

Returns on investments and servicing of finance
Interest paid                                      (553)       (694)     (1,361)
Interest element of hire purchase rentals            (5)        (10)        (20)

Net cashflow from returns on investments and       (558)       (704)     (1,381)
 servicing of finance

Taxation
Taxation paid                                         -           -           -

Capital expenditure
Purchase of tangible fixed assets                   (58)        (21)        (97)
Sale of tangible fixed assets                     4,535          53         116

Net cash inflow from capital expenditure          4,477          32          19

Net cash inflow/(outflow) before financing        5,716      (1,425)     (2,602)

Financing
Capital element of key purchase rentals             (38)       (206)       (307)

Net cash outflow from financing                     (38)       (206)       (307)

Increase/(decrease) in cash                       5,678      (1,631)     (2,909)


NOTES TO THE INTERIM REPORT

1  Basis of preparation
The figures for the 52 weeks to 31 January 1999 are an abridged version of the
audited accounts for the period which have been filed with the Registrar of
Companies and on which the auditors of the Company issued a report which, whilst
unqualified, contained an explanatory note drawing shareholders' attention to
the fact that the accounts have been prepared on a going concern basis which is
dependant on the Company's bank facilities remaining in place and the approval
of resolutions at the annual general meeting.  The remaining figures have not
been audited or reviewed by the Group's auditors.

2  Earnings per share
The calculation of earnings/(loss) per share is based on the net profit for the
period of £151,000 (1998 - loss of £1,045,000) and on an average of 94,069,754
(1998 - 94,069,754) ordinary shares in issue during the period. Diluted
earnings/(loss) per share is after taking into consideration share options and
gives an average of 96,836,685 (1998 - 98,809,636) ordinary shares.

3  Movement in equity shareholders' funds
                              26 weeks to    26 weeks to     52 weeks to
                            1 August 1999  2 August 1998   31 January 1999
                                £'000          £'000            £'000
Profit/(Loss) for the 
 period                             184          (1,012)        (5,817)
Non-equity minority interests       (33)            (33)           (65)

                                    151          (1,045)        (5,882)
Opening equity 
 shareholders' funds             (6,011)           (129)          (129)

Closing equity shareholders'
  funds                          (5,860)         (1,174)        (6,011)

4  Reconcilliation of operating profit/(loss) to the net cash flow 
   from operating activities
                              26 weeks to    26 weeks to     52 weeks to
                            1 August 1999  2 August 1998   31 January 1999
                                  £'000          £'000           £'000
 
Operating profit/(Loss)             594           (308)         (4,292)
Depreciation charges                110            281             644
Provision for permanent
 diminution in fixed asset
 value                                -              -           2,005
(Profit)/Loss on sale of
 tangible fixed assets              (52)            (4)            (53)
Decrease/(increase) in stocks       603          1,886           5,218
(Increase)/decrease in
 debtors                           (473)        (1,325)          2,462
(Decrease)/increase in
 creditors                        1,190         (1,088)         (5,280)
(Decrease)/increase in
 provisions                        (175)          (195)         (1,944)

Net cash inflow/(outflow) 
 from operating activities        1,797           (753)        (1,240)

5  Analysis of new debt
                              2 February    Cash    Translation   1 August
                                    1999    flow      difference      1999
                                  £'000     £'000        £'000       £'000

Debt due within one year        (15,539)    5,678        148        (9,713)
Finance leases                      (77)       38          -           (39)

                                (15,616)    5,716        148        (9,752)

6 Millennium 
The Directors are conscious of the Year 2000 issue and its effect on the
computer systems of customers, suppliers and companies in the Group. New 
computer hardware and software has been installed and tested to be Year 2000
compliant. A project team is co-ordinating the Group's efforts and it is
anticipated that the Group will achieve an acceptable state of readiness. Costs
incurred to date, in respect of the Year 2000 issue are within the Group's
normal capital expenditure levels and no further costs of any significance are
anticipated.